Bay Street disruptor Som Seif returns with a purpose

Long–time Bay Street disruptor Som Seif is finally making his full return to the investment community.

After a quiet launch earlier this year, the pioneer of Canada’s exchange-traded fund industry is rolling out a series of investment products aimed at taking hedge fund and other less-accessible strategies and making them available to the self-directed masses.

Starting next Tuesday, Mr. Seif’s encore endeavour, Toronto-based Purpose Investments, will be rolling out five new investment strategies — all managed by Toronto-based hedge fund firm Breton Hill. The five will be available as ETFs and in different mutual fund classes that investors can purchase on their own or through an advisor. Breton Hill has an undisclosed equity stake in Purpose.

I didn’t leave my legacy, and now I have a chance to do that

It is the beginning of unfinished business for Mr. Seif, 37, who founded ETF provider Claymore in 2005 and made his mark championing that Canadians were paying too much for too little when it came to their investments, especially mutual funds. He stepped down as CEO of Claymore a little over a year ago after his U.S. financial backer, Guggenheim Partners, sold the company to BlackRock Inc.

“We really want to change the industry,” Mr. Seif said. “I feel I did a bit of that at Claymore but I didn’t leave my legacy, and now I have a chance to do that.”

At Claymore, Mr. Seif built a very public profile espousing the ails of high fees and battling with Canadian mutual fund world. This much larger industry has been duking it out with ETFs which lure investors with lower fees and an ever-expanding range of investment options.

Related

While Canada was an outlier last month, flows into ETFs globally have continued to set records, with year-to-date flows through July surpassing 2012’s year-end total, according to asset manager BlackRock’s latest ETP Landscape monthly report.

Purpose’s five new strategies are a little different than your typical ETF or even mutual fund offering: A high-quality North American dividend fund, a total return bond fund, a real asset fund that invests in things like precious metals, real estate and currencies and a monthly income fund.

The kicker is the tactical hedged equity fund, which utilises a strategy commonly known in the hedge fund world as market neutral. This means it uses different kinds of investing methods that hedge out broader market exposure and in turn reduce volatility by going both long and short. This sort of sophisticated strategy is usually associated with much-higher-fee products and much-higher-net worth investors.

All five strategies will be managed by Breton Hill using the same proprietary methods it uses with its other, larger clients, among them the California Public Employees Retirement System (CalPERS), one of the biggest pension plans in the world. None of the five funds charge a fee of more than 0.80% all in.

“Other than just creating really cool products we also wanted to create something that everyone had access to,” he said.

Mr. Seif has plans not only to continue pounding the table about Canadians paying too much for their investments but forcing the competition to re-calibrate how – and how much – they charge.

“There’s a trillion dollars of investment funds out there, and they all overcharge,” he said. “I want to see the industry re-price, so when people think about charging for value they will have to really think about what these other guys – us – are doing.”

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First Asset sponsors ETF Insights as part of a commercial agreement with Postmedia and is responsible for selecting the authors whose work appears here. Postmedia has no involvement in the creation of this content.

First Asset sponsors ETF Insights as part of a commercial agreement with Postmedia and is responsible for selecting the authors whose work appears here. Postmedia has no involvement in the creation of this content.

First Asset sponsors ETF Insights as part of a commercial agreement with Postmedia and is responsible for selecting the authors whose work appears here. Postmedia has no involvement in the creation of this content.

First Asset sponsors ETF Insights as part of a commercial agreement with Postmedia and is responsible for selecting the authors whose work appears here. Postmedia has no involvement in the creation of this content.

First Asset sponsors ETF Insights as part of a commercial agreement with Postmedia and is responsible for selecting the authors whose work appears here. Postmedia has no involvement in the creation of this content.